Why is counter trade increasing?
There are a variety of reasons purchasers impose countertrade obligations on the seller.
1. The most important being a shortage of hard currencies. This is the most prevalent.
2. When a country produces a product in large quantities in which there is a low market demand, the country may offer products in counterpurchases as a means of getting rid of excess supply. Generally speaking, goods are offered for countertrade when there is a low or minimal market for the goods.
3. Another reason is because the country does not have an established international market in which to dispose of the goods. There may be a world market for the goods but the country does not have the ability or access to the market and thus may force products in countertrade.